Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Friday, November 26, 2010, from 8:23 to 8:31)

[Questions & Answers]

Q.

The Tokyo Stock Exchange is planning to regulate short selling of a company's stock prior to public stock offering. Given the fact that there have recently been a series of suspected cases of insider trading, please tell us how the Financial Services Agency (FSA) is regarding the issue and what action policy you have.

A.

I know that President Saito of the Tokyo Stock Exchange commented on November 24 at a press conference that he is concerned with the possibility that there may be cases of insider trading involving the leakage of offering information before the offering plan is announced, or cases of short selling in a large volume after the offering plan is announced and before the day the issue price of new shares is determined, thereby engaging in illegal dealing of reaping profits by acquiring the new shares at a depreciated price, and the Tokyo Stock Exchange is contemplating making recommendations on, among other things, enhanced monitoring of any unfair dealing and requirements for new rules on short selling.

At this point in time, the Tokyo Stock Exchange has not actually made any recommendation and the FSA is therefore not in a position to make any comment.

However, the FSA and the Securities and Exchange Surveillance Commission are committed to monitoring any signs of illegal trading on a daily basis and taking a strict line in the event that any act of violation, including a statutory violation, is discovered.  Considering that, on the subject of short selling in the course of public stock offering, there is a natural expectation that a marketplace should be fair and as transparent as possible, we are eager to do good research to figure out, among other matters, whether some step needs to be taken to ensure fairness in markets in Japan.

(End)